Define: Refinancing Cost

Business, Legal & Accounting Glossary

Definition: Refinancing Cost



Advertisement



Full Definition of Refinancing Cost


Refinancing cost is the amount of money a borrower will have to pay upfront to refinance his mortgage. Refinancing cost is typically similar to the closing cost a borrower pays when financing his home for the first time. Refinancing cost is an important consideration for borrowers, as the refinancing cost can quickly erode gains generated by the more favourable terms of the refinanced loan. A borrower’s overall refinancing cost might include a prepayment penalty, a type of refinancing cost that some states prohibit. Not all mortgages have a prepayment penalty, but if applied, it could significantly increase a borrower’s total refinancing cost. The other components that are typically part of an overall refinancing cost include an application fee, appraisal fee, survey costs, homeowner’s hazard insurance (unless the borrower can provide proof of current homeowner’s insurance), and lender’s attorney’s fees. Other components of the refinancing cost include title search costs, title insurance costs (may be reduced to re-issue rate), home inspection fees, loan origination fees, private mortgage insurance (when the loan-to-value ratio is greater than 80%), and discount points.


Advertisement




Cite Term


To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
https://payrollheaven.com/define/refinancing-cost/
Modern Language Association (MLA):
Refinancing Cost. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. April 05, 2020 https://payrollheaven.com/define/refinancing-cost/.
Chicago Manual of Style (CMS):
Refinancing Cost. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/refinancing-cost/ (accessed: April 05, 2020).
American Psychological Association (APA):
Refinancing Cost. PayrollHeaven.com. Retrieved April 05, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/refinancing-cost/

Definition Sources


Definitions for Refinancing Cost are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 6th February, 2020